How to use the personal loan EMI calculator
Enter the loan amount, the interest rate from your offer and the tenure in months or years. Then enter the processing fee, either as a percentage of the loan or as a flat rupee amount. Leave the GST box ticked, because 18% GST is charged on processing fees.
The calculator assumes the fee is taken out of the loan before the money reaches your account, as most lenders do. It also assumes a fixed rate, with your first EMI one month after you get the money.
How personal loan EMI is calculated
Personal loans in India use the reducing-balance method. Each month you pay interest only on the amount you still owe. The rest of your EMI pays down the loan.
EMI = P × i × (1 + i)n ÷ [(1 + i)n − 1], where P is the loan amount, i is the yearly rate ÷ 12 ÷ 100, and n is the number of months.
Example: ₹5,00,000 at 11% for 36 months. The EMI is ₹16,369. In the first month, interest is 11% ÷ 12 of ₹5,00,000, which is ₹4,583. The other ₹11,786 of your EMI reduces the loan. Each month you owe a little less, so the interest part shrinks and more of the EMI goes to the loan. In year 1 you pay ₹47,647 in interest. By year 3 it is only ₹11,220. Over the full loan you pay ₹89,297 in interest, and ₹5,89,297 in EMIs.
Open the month-wise schedule below the yearly table to see this split for every EMI.
Shorter or longer tenure?
A longer tenure lowers your EMI but makes you pay more interest. For the same ₹5,00,000 at 11%, a 2-year loan costs ₹23,304 a month and ₹59,294 in interest. Over 3 years it is ₹16,369 a month and ₹89,297 in interest. Over 5 years it is ₹10,871 a month, but interest rises to ₹1,52,273.
Pick the shortest tenure whose EMI you can pay comfortably every month, after rent, other EMIs and household costs. Keep some savings aside for emergencies too.
Processing fee and the real interest rate
Most lenders charge a processing fee, plus 18% GST on that fee. On the example loan, a 2% fee is ₹10,000, and GST takes it to ₹11,800. The lender takes this out up front, so only ₹4,88,200 reaches your account. You still repay EMIs on the full ₹5,00,000.
That makes the loan cost more than the quoted 11%. The results show two rates side by side. The interest rate is the rate the bank quotes; it is the only rate used to work out your EMI. The effective annual rate (APR) is the true yearly cost on the cash you actually receive, including the fee and GST. Here the quoted rate is 11% and the APR is 13.42%. With a 0.5% fee it would be 12.03%.
With no fee, the two rates are nearly the same: 11% quoted and 11.57% APR. The small gap is only because 11% charged monthly adds up to slightly more over a full year, just as FD interest does when it compounds.
The fee hurts more on short loans, because its cost is spread over fewer months. With the same 2% fee, the APR is 14.27% over 2 years but 12.73% over 5 years. When you compare offers, compare the APR, not just the rate. A lower rate with a high fee can cost more.
What the results mean
Total EMI payments is every EMI added up: the loan plus interest. Total payable including fee adds the processing fee and GST to that. Net disbursal is what lands in your bank account after the fee.
Your lender may work out the APR a little differently in its Key Facts Statement, and may add insurance or other charges that this calculator leaves out. The schedule also assumes you pay every EMI on time, with no rate changes and no prepayment. Ask the lender for a revised schedule if any of these apply.
Buying a car? The car loan EMI calculator shows how a bigger down payment cuts your EMI. Car loans are secured, so they usually cost less than personal loans. If you have savings in a fixed deposit, compare what it earns with the FD calculator before you borrow.